Arquebus Company Is Owned and Operated by a Craftsman Who

question 83

Multiple Choice

Arquebus Company is owned and operated by a craftsman who makes replicas of historic firearms for museums, sportsmen and collectors. He is currently producing 40 flintlock muskets per month. Cost data are as follows: In June, the cost of the special kind of metal he uses went up considerably, and the variable cost per unit increased by $50 per unit. The owner believes he can pass along half of the cost increase to his customers by raising the price to $745, and still maintain the same volume of sales. If so, how will this affect his operating income?

• A)It will go up by $1,000.
• B)It will go down by $1,000.
• C)It will go down by $1,225.
• D)It will go down by $2,500.

Explain how economic systems differ in terms of who owns the factors of production and how economic activities are coordinated.

Understand the implication of consumer preferences and profits on resource allocation and industry size.

Understand the fundamental concepts of management and its various functions.

Recognize the historical evolution of management theories and key contributors.

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Definitions:

Response Message

A response message is a reply or reaction to an initial communication or request, often used in both personal and professional settings to provide information, clarification, or decisions.

Adjustment Message

A type of communication in business meant to address and resolve a customer complaint or issue.

Future Business

Refers to the prospects, plans, and innovations that aim to ensure the growth and sustainability of a business in upcoming years.

Instruction Messages

Instructions communicated clearly to guide or direct actions.